Well, we’re past the 100-day mark and real estate professionals are … ambivalent about Zohran Mamdani.
CO surveyed some industry heavy-hitters and the mayor won great marks on zoning; good marks on crime and safety and transit; abysmal marks on taxes and the Rent Guidelines Board; and middling to incomplete marks on his relationship to the business community.
“The opportunity now is to channel the private sector’s continued commitment into a more productive dialogue,” said NYU’s Sam Chandan. “For that dialogue to be productive, the industry must be treated as a stakeholder in solving the city’s fiscal and housing challenges, not only as a source of revenue.”
That certainly wasn’t the spirit when the mayor recorded a video on Tax Day knocking Citadel’s Ken Griffin for Griffin’s $238 million penthouse, which would be heavily hit as part of Gov. Kathy Hochul’s proposed pied-à-terre tax.
“It may generate applause in certain political circles, but applause is not economics,” Bob Knakal noted in his column for CO about the tax. “If enacted, this would be yet another example of New York taxing the very activity it should be encouraging: ownership, investment, spending and development.”
But just as Mamdani condemns out of one side of his mouth, he proposes something extremely practical out of the other — namely, his proposal to bring down the rising insurance costs that have plagued affordable housing for years.
Deals, deals, deals
Mayoral questions aside, the deals are still coming in Manhattan.
Sovereign Partners is in contract to buy 575 Fifth Avenue from Beacon Capital Partners and MetLife for about $385 million.
Speaking of 575 Fifth, Urban Outfitters announced that they’re taking the retail space at the property. (They weren’t the only interesting retail lease last week: Nut Bar, a Toronto-based health food brand, took 2,500 square feet at 28 Greenwich Avenue, and the streetwear brand Clientele is opening a flagship store at 200 Bowery. We’re not surprised to be seeing positive Manhattan retail reports.)
Not to be left out, the office market saw Apollo Global Management take a robust 50,000 square feet at 590 Madison Avenue.
And we haven’t even gotten to the Penn Station submarket, which has been on fire lately.
Earnings, earnings, earnings
Forgive us if we’re channeling our inner Bill Murray, but it’s earnings season…. again. And the season kicked off with several of the big public companies reporting their numbers.
First, let’s look at the biggest office landlord in New York, SL Green Realty. The record was excellent when it came to leasing.
“We achieved nearly all of our objectives and then some,” said CEO Marc Holliday. “I know there’s some misunderstanding in the analyst community about the cadence of our quarterly earnings, but internally we were right on our numbers for Q1 and advanced many of our objectives for the year. The headline news starts with our leasing, where we had the single biggest first quarter in the 28-year history of this company.”
Indeed, Holliday told Commercial Observer separately that much of the analysis and the pricing of SL Green’s stock is off. “We know what the value of our portfolio is, and I can see the mispricing in the market,” Holliday said — but this problem might be something that much of the REIT world writ large is grappling with in the face of global uncertainty. (For a full picture of the non-leasing part of SL Green, one can read it here.)
SL Green wasn’t the only one boasting about their leasing. Prologis, the industrial behemoth, signed 66.7 million square feet of leases in the first quarter of this year — another one for the books.
“Our lease signings, proposal volume and build-to-suit pipeline point to continued strength in underlying demand,” said CEO Dan Letter, and added later: “The depth of customer interest for our data center offerings is significant. Customer interest in our powered sites is exceptional.”
Honestly, it wasn’t much of a surprise that Prologis would be riding this industrial and data center wave so well.
Despite all the worries in the market, many of those who attended the CO event “Industrial, Data Centers & Logistics Forum” at 601 Lexington Avenue were pretty sanguine about how the asset would fare amid Persian Gulf turmoil or tariff pressure.
“[Occupiers] can’t really plan their businesses around these various events, and they certainly can’t predict any level of normalcy, so I think most boardrooms today are talking about how they have to focus on the fundamentals, which are that the American consumer is fairly healthy,” said Mark Levy of FRP Development. “So I think there is a continuation of, ‘How can we build out a supply chain network that can reach our customers more consistently, more quickly?’”
And we are certainly seeing that money for industrial and data centers is available. Just last week, MDH Partners got new financing for its 1.6 million-square-foot acquisition of warehouses in four different states to the tune of $195.9 million.
Hires, hires, hires
With all the aforementioned activity, a smart firm needs good people to steer the ship. And there were a lot of hires last week. Hence, Fisher Brothers hired Jonathan Frey away from RFR Holding to be its new managing director of capital markets.
Adam America Real Estate hired David Brickman (formerly of onex real estate partners and Skyview Companies) to be its new CEO.
Russell Ginise and Kyle Winning are leaving their perch at Walker & Dunlop Affordable Preservation to head LaSalle Investment Management’s affordable housing office. As we’re sure you know, LaSalle is the investment arm of JLL — which just named Allison Buck as the new managing director of its New York tri-state nonprofit, education and government office.
Oh, and Philip O’Bannon is leaving his position as director at Citigroup to head infrastructure capital markets at Newmark.
Of course, a lot of this hiring is going on at the older, more established firms.
But this Sunday it might be better to sit back and read about someone who hired himself — Morris Betesh. Back in October of 2024, with about a dozen other brokers, Betesh launched Arrow Real Estate Advisors. His story is an interesting one — in 16 months he has arranged a whopping $7 billion worth of loans. One can read the full story here.
See you next week!
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